The National Affairs Desk of Glorious Noise

After reading the Gilded Age article that appeared in this past Sunday's New York Times, a friend of mine posed the question "are we really living in a new Gilded Age?" I think there are definitely parallels, but there are a lot of social and economic differences between then and now. Coming back to an old theme, I'd say the parallel of most concern is the growing disparity between rich and poor that we see today. It's certainly on par with what we saw in the Gilded Age and pre-depression America.

In the article, a bunch of the rich guys take issue with the suggestion that they make too much money. They say their work is worth the money they are paid or earn. Frankly, I don't really care how much they make, in the same way I don't care how much Kobe Bryant makes. It doesn't make sense to me, but I don't really care. I do care when it's absolutely unjustified - like when Paul Wolfowitz went to the World Bank after architecting this misbegotten war in Iraq with a $400,000 salary. He should be doing time, not doubling his salary.

But otherwise, I just want their income to be taxed, taxed, and taxed again (ok, once is enough, as long as it's for a lot). For example, the article mentions a hedgefund guy who made a billion dollars last year. That money should be taxed at 75%, or more. He'd still have hundreds of millions to work with.

Anybody making more than $250,000 should be looking at some serious taxes - not paying less, percentage wise, than working class people who can't afford a shifty accountant. That's the only way we're going to get out of the financial mess we're in - coupled with higher corporate taxes and fewer industry subsidies. They certainly don't need the tax cuts that the Bush administration and the embarrassingly subservient Congress gave them.

We've got $8.8 trillion in debt, for which we paid about $400 billion in interest last year. And will again this year, and the year after that, and ... That's basically the totality of funds for the Pentagon last year, minus the costs of the endless war in Iraq (and Afghanistan). On top of that, our budget deficit this year will be about $250 billion. That's the lowest in the Bush years, but still a huge sum of money. So like it or not, rich people - and most Americans, really - need to pay more in taxes, in addition to serious spending cuts across the board.

So taxing the bejeezus out of rich people will help on the income disparity a bit through income redistribution via gov't programs and other support for the poor. In addition, I would raise the federal minimum wage to $10 an hour, and let municipalities where it should be higher - NYC, Chicago, LA - adjust it up accordingly (a living wage). That would mean that the minimum yearly wage, for a job with 40 hours a week and two weeks of vacation, would be $20,000. The law would have to have exceptions to that, but I think it's reasonable for McDonald's, for example, to have to pay an FTE $20,000 a year to flip burgers. That, coupled with young people making $10 an hour for part time jobs as well, would put a lot more money into the economy than giving tax cuts on capital gains ever will.

Comments

Sorry dude, it has an undeniably righteous ring to it, but it's krazy talk and, taken to its logical conclusion, it's communism. And this homey definitely don't play dat.

We've already got enough sheep in this country who believe the government is some big magic problem-solving entity: if only "we" get the "right" people in there, the Gov. will make it all better somehow. Never gonna happen, never could happen.

We'd be much better off teaching people what the Constitution tells us the federal government can and can't do and showing them the hideous behemoth it has since become, to the detriment of nearly everything it touches.

We've already got a gov. positively addicted to enormous sums of our cash, acting perfectly entitled to it, and what gets better? Schools, for example, never get better. Politicians simply play three downs of the latest fad, then punt it to whomever runs for office next.

Plus, you start getting into dictating what's the "right" amount to make and you'll be on Animal Farm any minute, where some are created more equal than others. Let the market work it out.

Locally, I'm all for more taxes because you actually have some say in how those may be spent. (Unless you live in Chicago, in which case you are just subsidizing the lives of permanent public service Brahmins, heh heh). But federally politicians will always just tell you what you want to hear and spend it how they're gonna spend it. So you may as well let the rich be rich and try to get rich yourself, so you, too, can find expensively Byzantine ways to dodge our ridiculous tax system and buy the people who are spending your dough.

I have a big problem with the government taking from private citizens simply because they've been successful or lucky. Lets tax the fuck out of their business' exorbitant profits. If we stop treating any entity with a board of directors as if it is an individual, we'll have no problems finding the money for all of these expensive social programs. There's no "eminent domain" for the government to claim your lottery winnings or casino haul.

I don't want to encourage the government to invade our private lives any more than it does already. The problem is that large businesses are considered to be individuals despite the clear multiplicity of their decision-makers and liability-holders. Remove that, and tax them for real. And reinstitute usury laws. Plenty of money for everyone.

State-scale Communism is clearly not the answer, not just from the Soviet experience but also the failed Utopian and large-scale Commune experiences in the Americas. As soon as a group becomes too large, Communism encourages social "loafing" and removes social mobility. Starvation may disappear, but so does innovation and non-conformity. Boo, Communism.

I'd like to win the lottery someday, and I'd like to actually keep more than half of it if I do. I'm sick of seeing half of our budget go to the military and their contractors and then hearing that we need to "tighten our purse strings" or "tax the fuck out of people".

Taxing our crazy businesses for real (in exchange for taking their health care costs off their bottom line) will provide a huge amount of money. Lets see how that goes, then see which of our social programs we have to cut,

"We've already got a gov. positively addicted to enormous sums of our cash, acting perfectly entitled to it, and what gets better? Schools, for example, never get better. Politicians simply play three downs of the latest fad, then punt it to whomever runs for office next."

While I agree that there's lots and lots of abuse and inefficiency in federal programs, I take issue with people who somehow think this country was "better" before federal social programs like Social Security, Medicare, Headstart, etc. If you're lucky enough to still ahve them around, ask your grandparents how grand life was when there was no economic safety net for the old and infirm. Ask them if they knew any kids who never got even the most basic education how well most of them turned out. Ask them if their granparents couldn't have lived a more productive golden years with some basic medical care at their service. All this revisionism of the pre-Great Society era is a lot of horseshit.

Anyhow, Mike made it very clear that spending cuts HAVE to also come, but I don't think it's such a radical idea to ask those who have benefitted the most from this great country to contribute in equal proportion to getting her out of the shitter. I don't know if I agree with the rate Mike recommends, but I agree that tax cuts for the wealthiest when we're banking our future away to the Chinese is fucking insane.

I'm all for everybody paying their fair share via reasonably graduated taxes, but if taxes are too excessive, rich folks will figure a way around paying. They'll park all of their money off-shore.

For every person who believes that the government is a majic problem-solving entity, there is probably another person who is pining for a proto-anarchic dissolution of the government. If you're the Bush Administration, of course, you neuter government by under-funding various agencies and appointing incompetent cronies to run things with the intent of making them as ineffective as possible, thereby "proving" how ineffective government really is.

While Mike might be advocating a position that some would liken to communism, it is important to note that unregulated free markets can have some nasty consequences too. Followed to its logical ends, unregulated capitalism would result in the concentration of wealth into a few hands and competition would succumb to monopoly. Things would return to a relatively feudal state. The capitalist system would choke on itself. Imagine if the anti-trust laws had never been enacted.

While I like the idea of local control of tax dollars, let's not lose sight of the fact that America is absolutely huge and, to one degree or another, the states are interdependent. For example, the condition of transportation infrastructure in one state will affect the surrounding states' abilites to conduct interstate commerce. Hence, it might be best for some federal funds to be set aside to be used as needed throughout the nation's highway network rather than leave such decisions strictly to the states, which might act with complete disregard for what is in the best interests of the nation as a whole.

Given all of the great aspects of living in America, my tax bill is a small price to pay.

I agree that our taxes are a small price to pay and that the rich should certainly pay their fair share. I like the idea of a flat tax or "fair tax" but won't hold my breath, there.

Derek, your point about life being better before social programs is one I would not dare make. There are many programs and developments from that certain period of time that helped grow the middle class and we should be thankful for them.

Also, I refer specifically to the Federal Gov.

But it's a global economy, now; we're no longer that blue collar country. My biggest problem with most government social programs are their inevitable outcome: they inevitably become self-preserving bureaucracies. The benefits to the citizens, if any, become almost tangential to their political enterprise. Social engineering often replaces one problem with a new one.

The proper role of government, if it is to address social concerns at all, then should be in leadership/brokership, offering incentives, and of course enforcing laws.

Yes there should be safety nets.

Like Mike, it's hard not to look at these guys who seem to push pencils and golf, screw up companies, and walk away with a few hundred million.

But the rich do pay a lot of taxes already, and as Jude and I point out, spend quite a bit trying NOT to (which is why I think a simple flat(ter) tax system would work for everyone except politicians and bureaucrats.

I would love to see Democrats stop promising the moon to people through government largesse if only because there are too many ignorant people who think government SHOULD take care of them. Like so many other things in our inauthentic, superficially obsessed society, it is merely treating/masking symptoms instead of working for the cure (or better yet, prevention). That said, a Bill Clinton or an Obama has the right idea about these sorts of things. And why I grow to love Obama is that he is careful to de-emphasize the role of government in social problems. Rather than pander as do Edwards and H. Clinton, he can get away with the harder truth.

I don't mind a good socialist at the local level, but am genuinely frightened of one at the federal level.

Good to see an abundance of commentary on this. I just want to clarify a couple of things I said in the original post. When I say "a guy who makes a billion dollars a year should pay 75% or more in taxes," that is not unprecedented in American history. From 1951 to 1962, the highest tax bracket - households earning more than $400,000 - was 91% or 92% [See this chart]. And those were, by and large, the Eisenhower years (last decent Republican president). That wasn't communism, and the country didn't collapse as a result. Today, those same people are paying, typically, a lower percentage than us "regular" folk (for argument's sake, anyone making less than $100,000).

And to be clear, I'm not suggesting that someone who makes $250,000 should pay 75% or 90% of their income in taxes. But it should be higher than it is now, with the terrible, terrible tax cuts the Bush admin pushed through.

I agree that some rich people may skidaddle if their taxes get too high, but that happens now - witness the Haliburton CEO moving to Dubai (was it Dubai?). And you can penalize people that do that - put them on a no fly list. As far as evading taxes through loopholes, I agree, the tax code should be far simpler so it's not so easy to do that.

On the minimum wage, raising it to $10/hour isn't communism. It's adjusting for inflation.

So I'm not suggesting anything here that is completely outside the realm of reality. We've been there before. I'm all for trimming federal agencies and programs, and eliminating those that aren't effective. I'd like to see the Drug War die, farm commodity subsidies die, and building unnecessary walls on our borders die, just to name a few.

But the fact is, we have to do all of this - raise taxes on the rich and corporations, reduce spending, find other sources of revenue - in order to make a dent in the national debt, ensure we can pay our entitlement obligations for the baby boomers, address energy independence and global warming, and so on. These are the major challenges of our time, and the market - as far as I know - has never, on its own, successfully addressed a large societal issue. With the business environment we have, there is lots of opportunity for innovation and entreprenurial success, but without oversight, guidance, and regulation from the federal government, the market won't fix things. We'll continue to have lots of tasty, sugary breakfast cereals and iPods, but we won't see a move from carbon fuels to other energy sources - and increased efficiency - without the federal government creating a business environment that encourages it. Witness the Internet, the national highway system, airplane industry, etc. None of those would have ever gotten off the ground without investment and support from the federal government. And despite their flaws, without the FDA and EPA, corporations would be crapping all over the public interest in favor of corporate interest. And we wouldn't have clean drinking water or (relatively) safe drugs.